economics...?

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why is the demand curve facing a monopolist downward sloping while the demand curve is facing a perfectly competitive firm is horizontal??

2007-03-14 06:25:24 · 2 answers · asked by prettypls, 1 in Social Science ➔ Economics

2 answers

Yes.

2007-03-14 06:32:52 · answer #1 · answered by Silazius 4 · 0⤊ 0⤋

its all about elasticity. With monopolies there are no real substitutes for the good and the consumer will still consume it even with price increases. In perfectly competitive industries there are many substitutes and therefore a small change in price will lead to a large change in quantity.

2007-03-14 06:33:25 · answer #2 · answered by MJ 3 · 0⤊ 0⤋